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What to Do When Your Company Screws Up

In my last post I talked about how to provide good customer service when the customer himself/herself is wrong or makes a mistake. In this post I’d like to focus on what to do when your company screws up.

The public is never at a loss for examples of high-profile company screw ups. The one that really hit home for me has been the recent Southwest Airlines debacle regarding maintenance issues. I’m a huge Southwest fan and was disappointed that they compromised their reputation by falsifying records and then trying to cover up the deed. It looks like the matter was perpetrated by a few individuals in the company as well as some FAA officials (it’s still under investigation), but the company received a serious black eye.

Some companies handle mistakes very well. The Tylenol tampering scare in the early 1980s was handled immediately by Johnson and Johnson and to this day is recognized for its excellent response. Others companies have created huge problems due to the poor handling. Firestone Tires and Ford handled the situation by pointing fingers at each other when some of their tires were tragically defective.

So, what do you do when you make a big or even a small mistake? No matter the size of the problem, there are steps you can follow. The complexity of each step will depend on just how big the mistake it is; but the steps are the same.

1.Admit to the mistake quickly – Trying to cover up a mistake will come back to bite you. Someone is going to find out and it’s best to assume they will find out sooner rather than later. When we come forward ourselves to admit a mistake, customers are more forgiving.

2.Accept responsibility – Neither Firestone nor Ford accepted responsibility for the problem, and both companies were fried by the press. Accepting responsibility may seem dangerous in the short run (lawsuits, etc.) but the organization comes out stronger because of the willingness to own up to the problem. In fact, costly lawsuits can be even more likely when the company takes a belligerent stance.

3.Apologize – We all appreciate a sincere apology. Saying you’re sorry that the situation occurred can take the sting out the mistake. Sometimes a sincere apology is all the customer really wants!

4.Say what you’re going to do to fix the problem – If the wrong meal was delivered, say how you’re going to make it up to the customer. If the phone bill is wrong, say how you’ll handle it. Clearly communicate that you are taking ownership of the issue. If the tires are defective, tell us how you’re going take care of the situation and don’t waste time pointing fingers.

5.Explain what you’ll do so the problem doesn’t happen again – This step may not be necessary for some errors – you don’t really need to explain to the customer how you’ll make sure to deliver the right meal in the future. Bigger issues, like the Southwest Airlines maintenance problem, seriously erode customer trust. In that case, customers want to know that you are putting in processes to ensure the situation doesn’t happen again.

If more companies and employees would follow these steps, customers and companies would be better off. Everyone screws up and most of us can accept that as long as the organization handles the screw up well. Most of us are willing to give a second chance; maybe even a third. But if the situation is handled poorly, it may be one strike and you’re out.

When the Customer is Wrong

Most of us have grown up with the adage, “The customer is always right.” Well, if you’ve been in the real world for any time at all, you know that the customer is often wrong. They didn’t see the sign, read the directions, arrive on time, buy the right part, give the right specifications, etc, etc. Companies screw up often enough, but so do customers.

When I was working at Disney World, our philosophy was; “The guest may not always be right, but they will always be our guest.” A Disney colleague, Jim Cunningham, put it better when he said, “The guest may not always be right, but let’s allow them to be wrong with dignity.”

I love the way Jim put it. Letting the customer maintain his or her dignity in an uncomfortable or embarrassing situation is the sign of a professional. It’s easy to roll your eyes or somehow flaunt your knowledge or authority. But it’s a better business decision to ensure the customer’s dignity.

A favorite question most Disney cast members are asked is, “What time is the 3 o’clock parade?” On the surface, it seems like a ridiculous question and it might be tempting to let the guest know just how ridiculous the question is. But cast members know that the question-behind-the-question is, “What time does the 3 o’clock parade arrive here?” The parade route is a mile long and while it starts at 3 o’clock, it doesn’t arrive at some locations until 3:30.

The secret to maintaining the customer’s dignity is to understand the question-behind-the-question or the situation-behind-the-situation. When a customer asks a clearly costumed or uniformed employee, “Do you work here?” what he’s really asking is, “Can you help me?” When a customer enters the parking lot through the exit, he’s more than likely confused and not purposely breaking the rules.

Too many employees see such situations as an opportunity to belittle or ridicule. But those who handle the situation with compassion are the ones who see the big picture and generate customer loyalty. And they’re appreciated.

“The customer may not always be right, but let’s allow them to be wrong with dignity.”

Task Versus Experience: A Customer Service Case Study

I was conducting a client service seminar for a law firm recently and one of their attorneys shared a story that illustrates the difference between completing tasks and creating customer experiences. I shared a post about tasks and experiences last week, and this is a perfect example of the concept.

At the time of the story, this attorney was working for UPS in their legal office. They were receiving proposals from several law firms for a sizable project, and one of the leading contenders completed a thorough and well-drafted proposal. Wanting to ensure that it arrived on time the firm overnighted the proposal to UPS. Unfortunately, whoever sent the package sent it via FedEx. Needless to say, UPS did not award that firm the project. I’m sure their rationale went something like; “If that’s the attention to detail we can expect, no thanks.”

I’m sure the firm’s attorneys spent a lot of time and effort to craft a proposal that precisely met UPS’s needs. I know the hours of research, writing and rewriting that go into submitting a significant proposal. The person sending the proposal, however, saw the job of sending it as a task – something to be checked off as completed without much thought. He/she certainly didn’t think about the client experience. A two-minute, mindless blunder wiped out weeks or months of work.

It’s easy to fall into the trap of completing tasks. But when we put a face to the work; if we truly think about the customer or client on the receiving end of our work, we start to think about experiences.

I’ll end this post with the same question I asked last week: Are you completing tasks or are you creating experiences?

Screwing Over Customers is Not a Good Business Strategy

Very few industries have achieved the distinction of being universally despised. The airline industry and a couple of others have come close, but none have succeeded quite like the oil industry.

I was watching CNBC this morning and they ran a segment about rising fuel costs. No surprise there since it’s a hot topic right now; but what caught my attention was the news that production is actually being reduced even as we approach increasing demand due to the upcoming Memorial Day holiday and busy summer travel season.

The analysts on the program noted that production isn’t being reduced due to environmental concerns or anything noble like that, but to effect supply and demand, cause prices to rise, and maximize shareholder value. The key phrase in the report for me is “shareholder value.”

As an investor, I am all for maximizing shareholder value. I like to see the value of my investments go up (been pretty disappointed lately!), but I know the best business strategy for long-term shareholder value is not to gouge customers who have few alternatives (for now). Small companies, independent truckers, and other businesses are facing bankruptcy because they can’t afford fuel for their vehicles. Families struggling to make ends meet see the cost of gasoline impacting their ability to pay bills. All the while we watch the parade of oil company executives receiving multi-million dollar bonuses.

This post is not meant to be anti-capitalism. Quite the opposite. What’s best for long-term shareholder value is to create value and customer loyalty. You do that by building trust. And for the oil industry, trust is in the toilet. Oil company executives are actually failing their shareholders because they are causing the public to despise their companies. Right now we are handcuffed to their product, but the movement toward alternatives is accelerating at an unprecedented pace. There will come a time when these alternatives are viable and loyalty will shift, as will shareholder value.

Building loyalty, trust, and long-term success are the responsibility of any organization’s management team. And screwing over your customers is not a good business strategy.

The Experience of Great Customer Service

At the conclusion of a customer service seminar I recently conducted, a participant asked, “If you could just provide just one suggestion to improve customer service in an organization, what would it be?

I responded with the same answer I would give to any group of CEOs or any group of frontline employees. It’s to move from a task mentality to an experience mentality. Too many organizations and too many employees focus on completing tasks. Although the task may be done correctly, that approach certainly doesn’t create an emotional bond between a customer and an organization.

Walk into any organization and you can immediately recognize if employees are simply completing tasks or if they’re creating experiences. As a customer, if you feel you are simply being processed, then completing tasks is the objective. If you feel welcome and appreciated, that organization or employee is focused on creating a positive experience. The activities may be the same, but the feeling is completely different.

Think how each of the following interactions can be handled as tasks, and then think about how they can be treated as an experience:

  • Answering the phone
  • Answering a customer question
  • Ringing up a purchase
  • Delivering a customer check in a restaurant
  • Telling a customer what repairs were done on his/her car
  • Drawing a patient’s blood
  • Giving a airplane safety spiel
  • Discussing company benefits with new employees
  • Taking a bank deposit

Every one of these interactions can be done in a manner that either builds a relationship with a customer, or simply completes a transaction. The above list can be expanded to include any interaction between a customer and an employee.

The popular online video, Johnny the Bagger, highlights this difference and is worth checking out if you haven’t already seen it.

How about you? Are you completing tasks or are you creating experiences?